Michelle Levy, reviewer of the Quality of Advice Review, has defended her proposals to allow superannuation funds and banks to provide financial advice.
Speaking at the AFR Super & Wealth Summit in Sydney, Levy said she wanted these institutions to use the information they held to advise consumers as there would never be enough financial advisers.
“There are 16,000 financial advisers in Australia, no matter what I recommend, no matter what reforms are made, there will never be enough advisers for everyone to get the advice they need.
“Advice is episodic, so we need a diversity of providers and the obvious candidates are the people that look after our money or lend us money.
“We know super funds are giving advice. I would be saying they have a responsibility to be giving helpful advice to their members and likewise banks, insurance and investment managers,” she said.
In her QOA proposals paper published at the end of August, the reviewer proposed that the “definition of ‘personal advice’ should be somewhat broader so it is clear that it applies whenever a recommendation or opinion is provided to a client about a financial product (or class of financial product) and, at the time the advice is provided, the provider has or holds information about the client’s objectives, needs or any aspect of their financial situation”.
Speaking at the summit, Levy explained her thought process in creating this definition.
“The first step to think about in these proposals is that I am suggesting if an institution or a financial services provider has information about you or you are their customer, and they’re recommending a product or giving an opinion about it, then in my world they are giving personal advice. Now that is a big step up, that is a big consumer protection mechanism that doesn’t exist now.
“I think we need to encourage banks and institutions, insurers and everybody to use the information they have to give advice to their customers. If you expand the range of circumstances in which you’re giving personal advice, you need a standard that adjusts to the circumstances and to the needs of the client and I don’t think the best interests duty does that. It doesn’t cope very well with being an employee at a product issuer, whether that’s a superannuation fund or a bank or an insurer.
“Then I thought about what can we have that is fit for purpose and so I am thinking about a duty to give good advice, because that is the word people keep using when they describe what they want and what they want to give.”
This story first appeared in Money Management’s sister publication ifa.
What the !!!
Please refer Royal Commission where poor conduct predominantly related to the exact organisations she is looking to provide lower advice hurdles. If at all they should be the ones requiring SoA’s, RoA’s, filenotes, signed renewals and consents as opposed to relevant providers who have met all the hurdles that have been thrown at them to date.
Maybe Michelle needs to disclose her potential conflicts of interest as per her Allens profile “Michelle’s clients include the wealth management areas of each of the major banks, life insurance companies and industry and corporate funds.” which implies a degree of familiarity.
I did an internet serach for Levy. I learned she is a lawyer. It stated “Michelle’s clients include the wealth management areas of each of the major banks, life insurance companies and industry and corporate funds.”
I get a little cynical when she recommends her clients get a better result after her review. It could be possible that she was not entirely impartial?
Quote: ” Levy said she wanted these institutions to use the information they held to advise consumers as there would never be enough financial advisers.”
If this is sound logical analysis, may I please propose that because we have a shortage of doctors and nurses in the rural areas, that we allow pharmacists, relatives, bank managers ,neighbours, or others who have information that they hold to advise clients as there never will be enough doctors, nurses!
This is an absurd proposition on both accounts.
I see only further conflict here because this politician does not have the intellectual and logical acuity to propose a solution that actually addresses the critical issue.
So if there is a duty to give good advice, is it like “beauty”….it’s in the eye of the beholder!
Most people usually want an investment that provides an annual return of 10.0% p.a, an investment that has no risk and an investment that doesn’t require the payment of tax.
I’d like to know which bank product has those things please.
“Advice is episodic”? Who are these people? Hey Labor…you had a chance to fix the mistakes the previous morons made based on the other morons running the RC. Now we’ll let the organisations that were the cause of all this to go back and do what they did so well before. Wow!
The fact that every single financial advisers have been forced to back and study just to continue to work then turn around and say call center people and product providers employees that were just on contiki tour getting wasted every night can now come back get a job to recommend pension advice with no qualifications this is crazy talk. Make it easier for advisers to see more clients or allow advisers under the same rules you are suggesting for product providers then people might believe you.
The fact intra fund advice can only be provided by product providers and not the existing 16,000 financial advisers is all you need to know this is a setup by the government! Why not let advisers also give this advice under the same rules as the product providers? can’t do that because we need to keep production for clients ok well keep the same rules for product providers end of story. Levy wants to remove customers protections, remove the need for education standards, let product providers collectively charge everyone for personal advice if they receive it or not. coming from a lawyer who has made a career giving advice to product providers about giving financial advice to customers under general, was part of FOFA and then is hand picked for the gig…. mate tell me i’m wrong, but this is a setup….
If anyone suggested this type of stuff for the Lawyers profession it would be all over the media and is a joke.
What absolute garbage!! Advisers have been put through the wringer with the FASEA changes, yet she proposes that others who are not held to the same standard can provide “financial advice”. So much for “equality”. Once again, the likes of the industry super funds get a free ride whilst everyone else is has to adhere to a higher standard.
LMAO